Down, down, further down. i go down natural gas prices in Europe: -10% compared to the previous day, rapidly approaching the values recorded before the war. Meanwhile, reports Bloomberg, the rates of use of gas reserves in Europe are similar to those of 2020. It is less newsworthy but even more impressive is the decline in grain prices: in May-June the quotations had touched a maximum of 438 euros the ton with the prospect of new spectacular increases due to the feared stop of Ukrainian exports combined with the climate emergency that threatened to plague crops in Europe (drought) and North America (floods and various calamities). On the contrary, on international markets prices have taken the downward path: between 280 and 285 euros per ton, below the values marked before the conflict. And they promise to stay at these levels. For multiple reasons.
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Gas and cereal prices close to pre-war values
- La world production of cereals this year will reach the highest result ever: 763 million tons. The performance of Australia, 40 million tons, favored the records. But even in Europe, cereal prices are pointing downwards. This applies to France, a major exporter, but also to Italy: durum wheat is down on the main markets.
- The recent cold wave has reassured producers after the unnaturally hot December.
- The Putin risk premium has gradually disappeared. On October 28, the Tsar of the Kremlin had threatened to stop the agreement that allowed the sale of the Ukrainian wheat In Africa. Grain prices shot up but a week later, under pressure from Turkey, Russia backed down.
- Grain futures on the Chicago Stock Exchange, which had surpassed the highs reached in 2008 in the spring, have taken a downward path. Also fertilizers, shot up at the outbreak of war, are slowing down.
- Pushing prices down is theoil trend. The prices of soybeans and other cereals, the basis for the production of bioethanol, are linked to the trend of crude oil. Energy and agriculture go hand in hand.
Thus one of the factors that accompanied the rise in theinflation during 2022. But also the opportunity for huge profits made by the great Genevan traders. On the shores of Lake Geneva, in fact, about 50% of the large cereal contracts are concluded, as well as the coal and energy exchanges that have guaranteed stellar profits to Glencore, Trefigura and Vitol, the only winners of the Ukrainian conflict.
